The British Independent Retailers Association (Bira) has responded to the announcement that the UK inflation rates have risen to a new 40-year high of 9.4%.
Figures from the Office for National Statistics (ONS) show the government’s consumer prices index, which measures the price of living, was up from May’s 9.1% figure. Inflation, which stood at 2.5% in June 2021, has increased for nine months in a row and is expected to peak at above 11% when energy bills rise again in the autumn.
Bira CEO Andrew Goodacre has pointed to the increases in retail prices below the overall Inflation rate as evidence that margins are being reduced. He said: “Retailers are struggling to not to pass on to consumers ever-rising commodity prices, but we are now seeing signs that retail prices are drastically increasing in most sectors.”
He added: “This latest increase to 3.1% retail inflation seemed inevitable, and we are not surprised to see that some sectors have been affected worse than others. Since last summer we have been warning that double-digit supply chain inflation would result in higher prices. However, retailers are doing all they can to limit the price increases as they recognise that shoppers have less money to spend.
“We worry that these latest increases will further damage consumer confidence and reduce expenditure. Furthermore, we are concerned about the rising cost of debt payments as a result of interest rate rises, as many more independent retailers have increased levels of debt due to Covid.
“We feel that the government needs to review the options for paying back the bounce back loans and offer more flexibility to the businesses dealing with a tsunami of cost increases.”
Bira works with more than 6,000 independent businesses of all sizes, and its goal is to make every member feel supported, informed and inspired. Find out more at: bira.co.uk